The Canadian Taxpayers Federation: A Myopic Watchdog?

Anti-tax group setting up in Atlantic Canada; critics says it's all rhetoric

A self-described “taxpayer watchdog” group with offices across Canada is poised to open an office in Halifax this fall, according to recent media reports. But critics say the organization is little more than a right-wing media mouthpiece.

The Canadian Taxpayers Federation (CTF) advocates for “lower taxes, less waste, and more accountable government,” according to Kevin Gaudet, the group’s Federal Director.

CTF’s website highlights the federal long-gun registry, the amount paid to elected officials, and “eco-taxes,” as examples of wasted taxpayer money.

But Larry Haiven, a professor in the faculty of management at Saint Mary’s University, says most of CTF’s stances on issues – and particularly their relentless calls to lower taxes – are “the most simplistic garbage.”

“It assumes that nothing that is purchased with our taxes is of any use for us,” says Haiven.

“Provinces and the [federal government] have been cutting taxes frenetically, frantically, for the past 25 years…governments across Canada are taking in about $250 billion less than they did 15 years ago.

“You have to weigh that against everything the Taxpayers Federation says,” says Haiven.

Selective on spending

Erin Weir, an economist with the United Steelworkers’ Union who has publicly debated and frequently published on-line commentary about CTF, says the organization “represents the right-wing fringe of Canadian politics” and chooses to emphasize some issues over others based on ideology, not actual impact on taxpayers.

The CTF “uses issues like gun control and politicians’ salaries, which have almost no effect on overall government expenditures or tax rates, to foment distrust of public institutions,” says Weir.

Gaudet says that CTF stands up for taxpayers against “special interests,” which he defines as “anybody who’s taking money from government, to a certain extent.”

“We look at all issues, all political issues, all public policy issues through a lens of government spending”, says Gaudet.

However, some of the Harper government’s most expensive recent policy decisions barely figure on CTF’s radar.

Gaudet was reluctant to criticize the federal government’s package of ‘tough on crime’ legislation, even though, by the government’s own admission, there is no data to indicate that the new laws will reduce crime in Canada–while the cost of building new prisons and increasing sentences is estimated at $10-billion.

“Legislation ought to have cost impacts put out with it,” stated Gaudet, stopping short of any more specific criticism of the legislation.

In comparison, CTF led an extensive campaign against federal prisoners receiving old-age pensions; they claim the costs associated with inmates’ pensions total $14-million in a given year.

Gaudet also did not question the the government’s decision to purchase new F-35 fighter jets from a U.S. multinational, despite a $16-billion price tag; although he did post to his Facebook and Twitter accounts saying that the contract should have gone to tender. Several analysts have criticized the purchase on the grounds that Canada’s military has no need for such jets, among other arguments.

“I find that type of question [of whether the fighter jets are needed] usually to be the type of refrain from those interests who generally…don’t like Harper period,” says Gaudet. Opposition comes “from a bunch of people who like to pretend to think they’re experts on the unique service requirements of the Canadian Air Force, as if they had some unique perspective into the minds of the generals that run the show,” says Gaudet.

On most issues CTF indeed camps out on the far right of the Canadian political spectrum. Along with the Fraser Institute and the National Citizens’ Coalition, it was one of the only prominent voices in Canada to support the decision to abolish the mandatory long-form census, even though the replacement voluntary household survey may well cost more.

On the issue of climate change, CTF’s justification for its opposition to all government initiatives to reduce carbon emissions is straightforward: “We don’t believe there’s such thing as man-made climate change,” says Gaudet, adding that initiatives such as “cap-and-tax” are in no way proved to reduce CO2 emissions in any case.

When it was noted that 97% of scientists support the theory that greenhouse gases emissions are changing the climate, Gaudet challenged the Media Co-op: “I think you’re probably very selective, and this is part of the problem with the movement” he said. “You get a bunch of Kool-aid suckers who choose not to actually do much work, and mainly focus on that amount of stuff that gets published that suits their own interests. I disagree with the characterization that there’s consensus.”

It’s worth noting though, that some of the CTF’s campaigns could be seen to align with the political left. The group’s website denounces “corporate welfare,” and Gaudet lists the aerospace industry and the automobile industry among the “special interests” it accuses of begging at the public trough, noting millions of dollars doled out in government subsidies.

The group is “fairly consistent” in this respect says Larry Haiven. “They just don’t think government should be spending money on anything.”

Heeding the anti-tax message?

Haiven understands why CTF’s message resonates with many Canadians – the group claims 74,000 supporters on its website.

“Average earnings of Canadians…have not kept up with inflation,” notes Haiven. “[People are] looking for ways to save money, and one of the easy places to look is taxation. That’s part of what’s driving the anti-tax movement…The average person is earning less money…and so the appeal to somehow save some money is very attractive.”

But, he says, anti-tax advocates are barking up the wrong tree. He points to a study he co-authored in 2008 with economist Mathieu Dufour that shows that even though Nova Scotia’s economy grew by 62% over 20 years – 11 percentage points more than the national average – and workers’ productivity increased, their paycheques still shrunk by five per cent.

“The province is getting richer [in terms of GDP]…but working people are not getting richer, they’re poorer. So where is that money going? It’s obviously going into the hands of a few,” says Haiven. His 2008 study noted that across Canada, the incomes of the top 5% of Canadian families increased sharply between 1982 and 2004 while those of the bottom 70% declined.

“The Taxpayers’ Federation will tell you that government is getting richer, but that’s not true,” Haiven adds. “Government has shrunk…all across the country, the size of government, compared to GDP, has shrunk.”

“Their pronouncements tend to be sensationalist, so the media gravitates to it,” says Larry Haiven. “Media feeds the public perception that we’re somehow overtaxed and government’s too big.”

She points to a national poll commissioned by the CCPA in the fall of 2008, entering the global recession, in which overwhelming majorities of respondents agreed that government should take concrete action to reduce poverty, raise minimum wages above the poverty line, and provide affordable housing – even if it meant “higher taxes or cuts in spending in other areas.” On nearly every question, Atlantic Canadians polled higher than the Canadian average.

“Yes it resonates, but not with as many people as they say it does,” says Saulnier. “We’re not talking about the full implications of what it means to lower taxes. If we did, that would be a fairer debate. Then we’d see if it actually does resonate.”

Coming soon to a province near you

Saulnier is lukewarm about CTF’s pending arrival in Atlantic Canada.

“We’re about opening this debate,” she says. “We want to have a discussion about taxation.

“Having said that, I’m not sure it’s the Canadian Taxpayers’ Federation that can have that debate. We can’t have a discussion on taxation without talking about public services,” she says.

Erin Weir of the United Steelworkers notes that unlike think tanks, “the CTF does not produce research or analysis. Instead, most of its employees are essentially full-time media spokespeople.”

Weir remarks that while “the CTF presents itself as a grassroots movement…[i]ndividual Canadian taxpayers cannot become members of the CTF, vote on its policy positions or elect its leadership.”

Gaudet defends the organization’s structure and grassroots credentials. The CTF functions “the way Greenpeace is run,” says Gaudet. “We don’t take government money. We exist by virtue of cheques from 74,000 people, usually small cheques, in the $50-$300 range…small businesses, mom and pop shops, farmers, for example.”

Saulnier hopes that media coverage of the CTF’s stance on issues will be fair, and the group’s aims transparent.

“We’re more often than not presented in the media as left-wing,” she says. “It’s like a warning that this is coming from the left. We are open about what our mandate is and we’d like the same from the other side.”

“I think we agree with some of [their priorities], like accountable government,” she adds. “But we’d like to talk about who’s holding government accountable, and for what.”

The Canadian Taxpayers’ Federation at a Glance

Self-description: A citizen’s advocacy group dedicated to lower taxes, less waste, and accountable government.

Origins: Formed in 1990 through the merger of anti-tax groups in Manitoba and Saskatchewan.

Ideology: Though Federal Director Kevin Gaudet rejects ideological labels, finding them “not useful,” he says the best tag to attach to the group might be “libertarian.” Political scientist Brooke Jeffrey has written that CTF has a “neo-conservative approach to the role of government.”

Political partisanship: “All CTF staff and board directors are prohibited from holding a membership in any political party,” reads the organization’s website. Gaudet mentions that CTF is often accused of being a front for the federal Conservatives; however, he points to a “long list” of CTF’s criticisms of the Harper government. Some CTF staff have had ties to political parties – Gaudet himself worked for the Reform party, and Jason Kenney, current Conservative minister of Citizenship and Immigration, was president and CEO of CTF in the mid 1990’s.

Structure: Although CTF claims 74,000 “members,” critics charge CTF is not a member-run organization in the traditional sense of the word – Larry Haiven compares it to the Canadian Automobile Association, calling it a “franchise.”

Kevin Gaudet says CTF is run “the way Greenpeace is run.”The Media Co-op contacted Greenpeace Canada and found that like CTF, Greenpeace is a member-supported organization that accepts neither corporate nor political donations. Unlike CTF members, however, Greenpeace members can vote on resolutions at an Annual General Meeting, according to spokesperson Brian Blomme. Also unlike CTF, a summary of Greenpeace’s financial statement is available for download on its website.

Gaudet says CTF has a policy of not revealing its employees’ salaries, “like any private company.” (He did reveal his own annual salary when asked - $77,500.) At press time, Greenpeace had not responded to a request for its top employees’ salaries, though a “campaigns coordinator” position on its website lists a salary of $50,297.